Thursday Afternoon Coffee - Markets Update - 8 May 2025 - Markets Rally as U.S.-UK Trade Pact Ignites Optimism; Boeing Soars, Dollar Strengthens

The Trade Academy Team
2 days ago
3 min read

Markets Update: U.S. stocks surged Thursday as a landmark trade agreement between the United States and the United Kingdom boosted investor confidence, with President Donald Trump signaling deeper negotiations with China are imminent. Meanwhile, Boeing shares soared on a $10 billion aircraft order from Britain, and the dollar rallied on trade momentum and central bank divergence.

Global Markets Roundup: 8 May 2025

Wall Street Climbs as Trade Winds Shift

Equity markets advanced sharply following news of the U.S.-UK deal, which slashes British tariffs on U.S. goods to 1.8% from 5.1%. In exchange, the U.S. will maintain a 10% baseline tariff on UK imports, though key sectors like aerospace received exemptions.

The Dow Jones Industrial Average jumped 519.21 points, or 1.26%, to 41,633.18. The S&P 500 gained 71.48 points, or 1.27%, to 5,702.76, and the Nasdaq Composite climbed 306.09 points, or 1.73%, to 18,044.25.

Industrials and consumer discretionary stocks led gains, with nearly all 11 major S&P sectors in positive territory. The small-cap Russell 2000 outperformed, rising 2.3% to its highest level in over a month.

Airline shares soared as Rolls-Royce parts were excluded from tariffs, lifting the S&P 500 passenger airlines index 6%. Delta Air Lines rallied 7%, while Boeing climbed 4.2% after Commerce Secretary Howard Lutnick confirmed a $10 billion UK purchase order.

Semis Extend Rally, ARM Slumps

Semiconductor stocks rose 1.9%, continuing momentum from Wednesday after reports emerged that the U.S. may ease restrictions on AI chip exports. However, ARM Holdings fell 4.8% after forecasting disappointing Q1 revenue and profit. Luxury brand Tapestry gained 3.6% after raising annual forecasts, while Krispy Kreme sank 26.7% as it pulled its full-year outlook.

Fed Holds, Labor Market Mixed

The Federal Reserve held interest rates steady Wednesday, flagging increased risks of inflation and unemployment. Futures markets now see a 60% chance of a July rate cut, down from 92% a week ago. Economic data was mixed: weekly jobless claims fell more than expected, suggesting labor market resilience, but productivity declined for the first time in nearly three years.

Dollar Firms on Trade News and BoE Cut

The U.S. dollar rose sharply against the yen and Swiss franc, buoyed by the trade deal and the Federal Reserve’s cautious tone. The dollar index DXY climbed 0.41% to 100.31.

USDJPY rose 0.98% to 145.185, and USDCHF advanced 0.48% to 0.8275. Sterling reversed earlier gains after the Bank of England cut interest rates by 25 basis points in a divided vote. GBPUSD dipped 0.09% to $1.32775, while EURUSD fell 0.33% to $1.1262. The greenback also strengthened against Scandinavian currencies after Sweden’s Riksbank and Norway’s Norges Bank left rates unchanged.

Crypto Rebounds, Gold Drops

Bitcoin surged 4.69% to $101,312.68, while Ethereum jumped 14.47% to $2,058.62. In contrast, gold retreated sharply, with front-month Comex gold for May falling 2.51% to $3,296.60 per ounce, and June contracts last seen at $3,307.80.

Commodities Mixed

Cotton futures fell below 67 cents per pound under pressure from a firmer dollar and soft grains sentiment. Cocoa eased toward $8,900/tonne after reaching $9,200 earlier in the week.

Grain markets were mixed:

Soybeans (ZS1!): +5¾ cents to $10.45/bushel
Wheat (ZW1!): -5 cents to $5.29¼/bushel
Corn (ZC1!): -1¾ cents to $4.47½/bushel

Looking forward refer to the economic calendar below to see the upcoming events scheduled for today and the rest of the week.

General news - Information source from multiple newswires.

The article and the data is for general information use only, not advice!

The Trade Academy Team